Core Insights - Stratasys Ltd. has released its fourth annual Environmental, Social and Governance (ESG) and Sustainability Report, highlighting significant advancements in its Mindful Manufacturing™ principles [1] - The 2024 report features the company's first-ever year-over-year Scope 3 greenhouse gas (GHG) emissions disclosure, which has been verified by independent third parties [1]

Company Overview - Stratasys reported Q2 2025 non-GAAP earnings of 3 cents per share, matching the Zacks Consensus Estimate, compared to a non-GAAP loss of 4 cents per share in the same quarter last year [2] - Revenues for the quarter were approximately flat year over year at $138.1 million, slightly beating the consensus mark by 0.48% [2] Revenue Breakdown - Product revenues increased by 1.3% year over year to $94.8 million [3] - System revenues grew by 5.5% year over year to $30.6 million [3] - Consumables revenues decreased by 0.6% year over year to $64.2 million [3] - Services revenues declined by 2.6% year over year to $43.3 million [3] Profitability Metrics - Non-GAAP gross profit fell by 2.7% year over year to $65.8 million, with a non-GAAP gross margin contraction of 140 basis points to 47.7% [3] - Operating expenses dropped by 12.1% year over year to $76.1 million, with R&D expenses declining by 22.4% to $19.9 million and SG&A expenses falling by 7.7% to $56.2 million [4] - Non-GAAP operating profit was $1.1 million compared to an operating loss of $3.2 million in the year-ago quarter [4] Balance Sheet and Cash Flow - As of June 30, 2025, Stratasys had cash and short-term deposits of $254.6 million, up from $150.1 million as of March 31, 2025 [5] - The company reported an operating cash flow of $1.1 million for the quarter, down from $2.4 million [5] 2025 Outlook - Stratasys expects revenues between $550 million and $560 million for 2025, with non-GAAP earnings projected in the range of 13-16 cents per share [6] - The anticipated gross margin is between 46.7% and 47%, with a non-GAAP operating margin expected to be in the range of 1.5-2% [6] Estimate Trends - Recent estimates for Stratasys have trended downward, with the consensus estimate shifting by -950% [7][10] Industry Comparison - Stratasys belongs to the Zacks Commercial Printing industry, where competitor 3D Systems has gained 7.7% over the past month [11] - 3D Systems reported revenues of $94.84 million for the last quarter, reflecting a year-over-year decline of 16.3% [11]

Core Viewpoint - Stratasys Ltd. (NASDAQ: SSYS) reported Q2 numbers that were not positively received, indicating potential challenges ahead for the company [1]. Financial Performance - The Q2 results of Stratasys did not meet expectations, suggesting a need for further analysis of the company's financial health and operational performance [1]. Investment Perspective - The company is viewed through a long-term investment lens, with a focus on maintaining a balanced portfolio that includes growth, value, and dividend-paying stocks, although there is a stronger inclination towards value investments [1]. Market Sentiment - The overall sentiment surrounding Stratasys's recent performance appears to be cautious, reflecting investor concerns about the company's future prospects [1].

[Financial Statements](index=3&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Stratasys' total assets grew to $1.14 billion by June 30, 2025, with equity increasing to $902.4 million from a PIPE transaction Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $614,846 | $512,961 | | **Total Assets** | $1,138,987 | $1,029,746 | | **Total Current Liabilities** | $166,049 | $167,214 | | **Total Liabilities** | $236,606 | $236,755 | | **Total Equity** | $902,381 | $792,991 | [Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 revenues were flat at $138.1 million, with operating loss narrowing to $16.6 million and net loss per share improving to $(0.20) Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total Revenues** | $138,086 | $138,041 | | **Gross Profit** | $59,494 | $60,500 | | **Operating Loss** | $(16,620) | $(26,043) | | **Net Loss** | $(16,745) | $(25,743) | | **Net Loss Per Share** | $(0.20) | $(0.36) | H1 2025 vs H1 2024 Performance (in thousands, except per share data) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Total Revenues** | $274,132 | $282,091 | | **Gross Profit** | $119,733 | $124,397 | | **Operating Loss** | $(29,024) | $(50,496) | | **Net Loss** | $(29,799) | $(51,726) | | **Net Loss Per Share** | $(0.38) | $(0.74) | [Consolidated Statements of Changes in Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to $902.4 million by June 30, 2025, primarily due to $119.3 million net proceeds from a PIPE transaction - A Private Investment in Public Equity (PIPE) transaction resulted in the issuance of 11.65 million new ordinary shares, providing net proceeds of **$119.3 million**, which was the main contributor to the increase in total equity[7](index=7&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $3.4 million for H1 2025, with significant investing outflows offset by $118.3 million from financing activities Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $3,431 | $4,901 | | **Net cash used in investing activities** | $(123,943) | $(14,941) | | **Net cash provided by (used in) financing activities** | $118,284 | $(701) | | **Net change in cash, cash equivalents and restricted cash** | $841 | $(11,728) | [Notes to Condensed Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Note 1. Business Description and Basis of Presentation](index=11&type=section&id=Note%201.%20Business%20Description%20and%20Basis%20of%20Presentation) Stratasys, a global leader in polymer-based 3D printing, prepares financial statements under U.S. GAAP, noting limited impact from the Israel conflict - Stratasys is a global leader in connected, polymer-based 3D printing solutions, focusing on the manufacturing sector[11](index=11&type=chunk) - The military conflict in Israel has had a **limited impact** on the company's operations and financial condition for the first half of 2025[14](index=14&type=chunk) [Note 2. New Accounting Pronouncements](index=11&type=section&id=Note%202.%20New%20Accounting%20Pronouncements) The company is evaluating new accounting standards for income tax disclosures, expense disaggregation, and business combinations, effective in future periods - The company is assessing new accounting standards that will enhance disclosures for income taxes (ASU 2023-09), expense disaggregation (ASU 2024-03), and business combinations (ASU 2025-03), which are effective in future periods[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) [Note 3. Certain Transactions](index=13&type=section&id=Note%203.%20Certain%20Transactions) The company's equity investment in Ultimaker was **$35.1 million**, with a **$4.0 million** share of losses, and completed minor acquisitions including Forward AM - The company's equity investment in Ultimaker amounted to **$35.1 million** as of June 30, 2025. The share in Ultimaker's losses for the first six months of 2025 was approximately **$4.0 million**[23](index=23&type=chunk) - During the first half of 2025, the company completed several small acquisitions, including Forward AM and certain assets from Nexa3D Inc[24](index=24&type=chunk) [Note 4. Revenues](index=14&type=section&id=Note%204.%20Revenues) H1 2025 revenue slightly decreased to $274.1 million, with Americas as the largest market and remaining performance obligations at **$95.1 million** Revenue by Geographical Region - Six Months Ended June 30 (in thousands) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Americas | $165,095 | $170,296 | | EMEA | $74,001 | $75,526 | | Asia Pacific | $35,036 | $36,269 | | **Total Revenues** | **$274,132** | **$282,091** | - As of June 30, 2025, the company had **$95.1 million** in Remaining Performance Obligations (RPO), with **$63.7 million** expected to be recognized as revenue within the next 12 months[31](index=31&type=chunk) [Note 5. Inventories](index=17&type=section&id=Note%205.%20Inventories) Total inventories decreased to **$164.6 million** by June 30, 2025, from **$179.8 million** at year-end 2024, reflecting improved management Inventory Breakdown (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finished goods | $83,589 | $90,702 | | Work-in-process | $7,856 | $7,491 | | Raw materials | $73,140 | $81,616 | | **Total** | **$164,585** | **$179,809** | [Note 6. Goodwill and Other Intangible Assets](index=17&type=section&id=Note%206.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill increased to **$101.6 million** due to acquisitions and currency adjustments, with other intangible assets stable at **$106.0 million** - Goodwill increased by **$2.5 million** in the first half of 2025, primarily from acquisitions (**$0.7 million**) and currency translation adjustments (**$1.8 million**)[34](index=34&type=chunk) - The net book value of other intangible assets was **$106.0 million** as of June 30, 2025, with developed technology (**$78.9 million**) being the largest component[35](index=35&type=chunk) [Note 7. Net Loss Per Share](index=18&type=section&id=Note%207.%20Net%20Loss%20Per%20Share) Net loss per share significantly improved to **$(0.20)** for Q2 2025 and **$(0.38)** for H1 2025, with no dilutive shares included Net Loss Per Share (Basic and Diluted) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $(0.20) | $(0.36) | | **Six Months Ended June 30** | $(0.38) | $(0.74) | [Note 8. Income Taxes](index=18&type=section&id=Note%208.%20Income%20Taxes) Income tax expense for H1 2025 was **$1.5 million**, consistent with the prior year, influenced by geographic earnings distribution - The company recorded income tax expenses of **$1.5 million** for the six-month period ended June 30, 2025, consistent with the same period in 2024[39](index=39&type=chunk) [Note 9. Fair Value Measurements](index=19&type=section&id=Note%209.%20Fair%20Value%20Measurements) Significant Level 3 fair value measurements include **$11.8 million** in convertible notes assets and **$13.0 million** in contingent consideration liabilities - The company's most significant Level 3 fair value measurements are convertible notes assets of **$11.8 million** and contingent consideration liabilities of **$13.0 million**[40](index=40&type=chunk) [Note 10. Derivative instruments and hedging activities](index=20&type=section&id=Note%2010.%20Derivative%20instruments%20and%20hedging%20activities) The company uses foreign currency forward contracts to hedge exchange rate volatility, with a total notional amount of **$213.4 million** as of June 30, 2025 - The company uses derivative financial instruments to manage its net exposure to foreign currency exchange rates, primarily the NIS, Euro, British Pound, and several Asian currencies[43](index=43&type=chunk)[44](index=44&type=chunk) - As of June 30, 2025, the company had foreign exchange forward contracts designated as cash flow hedges for the conversion of **$30.2 million** into NIS and **€68.4 million** into dollars[47](index=47&type=chunk)[49](index=49&type=chunk) [Note 11. Equity](index=21&type=section&id=Note%2011.%20Equity) Equity changes include a **$120 million** PIPE transaction, no share repurchases, and **$12.4 million** in share-based compensation for H1 2025 - On April 8, 2025, the company completed a **$120 million** private investment in public equity (PIPE) transaction, issuing **11.65 million** new shares at **$10.30** per share[53](index=53&type=chunk) - The company has a **$50 million** share repurchase program authorized in September 2024, but no shares were repurchased during the first six months of 2025[51](index=51&type=chunk)[52](index=52&type=chunk) Share-Based Compensation Expenses (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | $6,138 | $7,346 | | **Six Months Ended June 30** | $12,351 | $15,995 | [Note 12. Contingencies](index=24&type=section&id=Note%2012.%20Contingencies) The company is involved in ordinary course legal proceedings, which management expects will not significantly impact its financial position or results - The company is a party to various ordinary course legal proceedings, which management does not expect to have a **significant effect** on its financial position, profitability, or cash flows[58](index=58&type=chunk) [Note 13. Segment](index=25&type=section&id=Note%2013.%20Segment) Stratasys operates as a **single operating and reportable segment**, focusing on 3D printing systems, services, and consumables - The company's business is managed as a **single operating and reportable segment**, generating revenues from 3D printing systems, related services, consumables, and additive manufacturing solutions[59](index=59&type=chunk) [Note 14. Restructuring costs](index=25&type=section&id=Note%2014.%20Restructuring%20costs) The 2024 Restructuring Plan was substantially completed by year-end 2024, with a remaining liability of **$3.6 million** as of June 30, 2025 - The 2024 Restructuring Plan, aimed at achieving **$40 million** in annualized cost savings, was substantially completed by the end of 2024[60](index=60&type=chunk) - As of June 30, 2025, the accrued liability for the 2024 Restructuring Plan was **$3.6 million**[61](index=61&type=chunk)

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $138.1 million, slightly higher than Q2 2024, reflecting ongoing customer deferral of major capital spending due to market uncertainty [21] - GAAP gross margin was 43.1%, down from 43.8% in the same period last year, while non-GAAP gross margin was 47.7%, down from 49% [22] - GAAP operating loss for the quarter was $16.6 million, an improvement from a loss of $26 million in the same period last year, while non-GAAP operating income was $1.1 million compared to a loss of $3.2 million [23][24] - Cash flow used in operating activities was $1.1 million, an improvement from $2.4 million in Q2 2024, with an expectation of positive operating cash flow for the full year 2025 [24] Business Line Data and Key Metrics Changes - Product revenue was $94.8 million, up from $93.6 million in the same period last year, while service revenue was $43.3 million, down from $44.4 million [21] - Within product revenue, system revenue increased to $30.6 million from $29 million, and consumables revenue was $64.2 million, slightly down from $64.6 million but up 2.6% sequentially [21] Market Data and Key Metrics Changes - Customer engagement remains strong despite macroeconomic challenges, with ongoing investment in R&D and new technology offerings [6][20] - The company launched the North American Stratasys Tooling Center to help manufacturers validate and scale additive manufacturing applications [9] Company Strategy and Development Direction - The long-term growth strategy focuses on capturing opportunities in high-growth sectors influenced by megatrends such as supply chain localization and sustainability [7][8] - The company emphasizes innovation and execution, aiming to solidify its leadership in digital manufacturing as market dynamics stabilize [6][30] Management's Comments on Operating Environment and Future Outlook - Management noted that customer spending remains challenged, impacting near-term business views, but the long-term outlook remains positive [19][20] - The return to normalized capital spending has been delayed, with expectations for significant opportunities in production applications to close potentially moving into 2026 [25][26] Other Important Information - The company ended the quarter with $254.6 million in cash and equivalents, bolstered by a $120 million investment [25] - New material offerings include P3 Silicon 25A, designed for the Stratasys Origin DLP platform, enhancing capabilities in industrial 3D printing [16] Q&A Session Summary Question: Can you clarify which specific verticals or regions are seeing the most pronounced slowdown or delays? - Management clarified that there is no slowdown, only delays, particularly in larger production application deals which have longer sales cycles [32][34] Question: What assumptions are baked into the fourth quarter adjusted EBITDA margin? - The guidance for Q4 is largely based on cost monitoring and reductions, with no large deals factored into the model [39][40] Question: What is impacting the gross margin? - Gross margin changes are attributed to sales mix changes, inventory absorption issues, and tariff impacts [43][46] Question: Can you elaborate on the Nexa asset acquisition? - The acquisition included valuable IP and R&D knowledge, positioning the company stronger in key use cases [56][59] Question: Do you anticipate additional partnerships with other vehicle OEMs? - Management expressed optimism about expanding partnerships, leveraging proven use cases from collaborations with GM and Toyota [72][74]

Core Insights - Stratasys reported quarterly earnings of $0.03 per share, matching the Zacks Consensus Estimate, and showing improvement from a loss of $0.04 per share a year ago [1] - The company achieved revenues of $138.09 million for the quarter ended June 2025, slightly exceeding the Zacks Consensus Estimate by 0.48% and showing a marginal increase from $138.04 million year-over-year [2] - Stratasys shares have increased approximately 27.9% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] Earnings Outlook - The future performance of Stratasys stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - Current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $142.55 million, and for the current fiscal year, it is $0.32 on revenues of $570.04 million [7] Industry Context - The Commercial Printing industry, to which Stratasys belongs, is currently ranked in the top 23% of over 250 Zacks industries, indicating a favorable outlook [8]

Group 1: CoreWeave Inc Financial Results - CoreWeave reported a revenue of $1.21 billion for the second quarter, exceeding analysts' expectations of $1.08 billion [1] - The company's adjusted loss per share was 27 cents, which was worse than the anticipated loss of 17 cents per share [1] Group 2: Stock Movements - CoreWeave shares fell 8.8% to $135.72 in pre-market trading following the mixed quarterly results [2] - Profrac Holding Corp shares tumbled 29.4% to $4.46 after pricing a $75 million stock offering at $4 per share [4] - CAVA Group Inc shares dipped 24% to $64.26 after reporting worse-than-expected quarterly sales results [4] - Journey Medical Corp shares declined 20.5% to $6.79 after reporting disappointing second-quarter EPS results [4] - Ondas Holdings Inc shares fell 17.5% to $3.54 after announcing a proposed public offering [4] - KinderCare Learning Companies Inc shares dropped 16.4% to $8.20 after missing second-quarter earnings estimates and narrowing 2025 guidance [4] - Endeavour Silver Corp shares fell 13.9% to $4.95 after posting a loss for the second quarter [4] - Stratasys Ltd shares dipped 13.4% to $9.80 following second-quarter results [4] - Denison Mines Corp shares declined 8.8% to $1.97 as the company announced the pricing of upsized $300 million convertible senior notes offering [4] - Hanesbrands Inc shares fell 7.7% to $5.70 after a previous jump of 28% due to acquisition news [4] - Penguin Solutions Inc shares fell 5.8% to $22.84 in pre-market trading [4]

Financial Performance - Q2 2025 revenue was $138.1 million, a 0.1% increase year-over-year[26, 48] - GAAP gross margin was 43.1% in Q2 2025, a decrease of 0.7% compared to Q2 2024's 43.8%[30, 48] - Non-GAAP gross margin was 47.7% in Q2 2025, a decrease of 1.3% compared to Q2 2024's 49.0%[30, 48] - GAAP operating loss improved to $16.6 million in Q2 2025 from $26.0 million in Q2 2024[36, 48] - Non-GAAP operating income was $1.1 million in Q2 2025, compared to a loss of $3.2 million in Q2 2024[36, 48] - GAAP net loss improved to $16.7 million in Q2 2025 from $25.7 million in Q2 2024[36, 48] - Non-GAAP net income was $2.2 million in Q2 2025, compared to a loss of $3.0 million in Q2 2024[36, 48] Balance Sheet and Cash Flow - The company's cash and cash equivalents and short-term deposits were $254.6 million in Q2 2025[39] - Net working capital was $448.8 million in Q2 2025[39] - Cash flow from operating activities was negative $1.1 million in Q2 2025[38] Outlook - The company expects full-year 2025 revenue between $550 million and $560 million[42] - The company expects full-year 2025 non-GAAP gross margins between 46.7% and 47.0%[42] - The company expects full-year 2025 non-GAAP operating expenses between $248 million and $251 million[42]

Group 1 - The focus is on identifying and analyzing companies that can play a significant role in today's geopolitics and leverage their intellectual property to become future leaders [1] - The investment strategy targets growth companies, particularly in the mid-cap segment, with a focus on sectors such as biotechnology, computer chips, cloud technology, energy, and commodities [1] - A systematic balance sheet analysis will be conducted, as many growing businesses often struggle with funding, while a stress test will be used to evaluate the safety of each business model [1] Group 2 - Long-term capital appreciation is prioritized over short-term speculation, indicating a strategic investment approach [1] - The analyst has a background in communication and an MBA, enhancing the depth of analysis provided [1] - The analyst aims to provide extensive coverage on the relevant themes and welcomes feedback to improve the quality of insights shared [1]

Company Overview - Stratasys (SSYS) shares increased by 6.9% to close at $11.73, with notable trading volume compared to typical sessions, and a 2.1% gain over the past four weeks [1] - The company is focused on ongoing R&D investments that lead to new products, materials, and software solutions, including the launch of GrabCAD Print Pro 2025 [2] Earnings Expectations - Stratasys is expected to report quarterly earnings of $0.03 per share, reflecting a year-over-year increase of 175%, while revenues are projected at $137.43 million, a slight decline of 0.4% from the previous year [3] - The consensus EPS estimate for Stratasys has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] Industry Context - Stratasys operates within the Zacks Commercial Printing industry, where Quad/Graphics (QUAD) also resides, with QUAD closing 3.8% higher at $5.69 and returning 0.7% over the past month [4] - Quad/Graphics has an unchanged consensus EPS estimate of $0.12 for the upcoming report, consistent with the previous year's results, and also holds a Zacks Rank of 3 (Hold) [5]